Wild Life Of A Little Monster

Others are scared of me because of all the fun I have. Considered a vigilante by my Eponine.

Free Tax Advice

Did taxes for a friend's two sons this week. Both of the sons are young, with one still in high school. While working on their taxes I discovered great information on the IRS website.

Free Tax Preparation & e-Filing
Tax filers with an adjusted gross income of less than $52,000 a year can utilize a free federal tax preparation and electronic filing program. Seriously, it's free! However, there are fees involved if you want a state return completed.

This is a link to details on the IRS site. According to the IRS, 70 percent of all taxpayers – 95 million taxpayers – can take advantage of the "Free File" program.

According to a recent article in The Kansas City Star, about 62 percent of taxpayers pay someone to do their tax returns. Additionally, about 26 percent purchase software to do taxes on home computers. Lastly, on average, tax preparers charge $72 to do a 1040EZ or a 1040A. The leading tax preparation companies reported that last year's average collected from clients was $155.21 and $177.65, respectively.

For my friend's sons, I went through the list on the IRS site and randomly picked one of the companies. Entered the information and e-filed it all to the IRS. Boom. It's done. Mind you, these two had simple forms. However, I checked out the sites and they can handle even complicated tax filings.

Telephone Excise Tax Credit
Almost everyone filing can claim a one-time credit on their 2006 federal return. Essentially, if you paid a long-distance telephone bill in the last three years, you are due a refund. The one-time payment is to refund previously collected long-distance telephone taxes. This excise tax was established in 1898 to fund the Spanish-American War.

There is a standard refund taxpayers can claim just by filling out one line on their forms. The standard refund is $60 for a family of four or more, $50 for a family of three, $40 for a family of two or $30 for a single filer (me).

This is like being given a case of beer from the IRS just for filling out one line. On the electronic form, you just have to check a box. Even those who don't file taxes can claim the refund by utilizing a form 1040EZ-T. This form is only for people who are not required to and do not file an individual income tax return.

The other option is to find all the old phone bills and total up from each bill the actual amount of tax paid. In that case, a Form 8913 is required to claim the refund. Of course, the IRS is watching out for abuse and will audit those claiming unusually high amounts.


At February 12, 2007 10:27 PM, Blogger bat & bandit & holly said...

that was really nice of you to do their tax returns, cowboy.

At February 13, 2007 3:46 AM, Blogger One of us said...

Mom wus thinkin' about using this free thing, but she isn't sure. We will tell her to read your blog for information. ~Poiland Tribe

At February 14, 2007 11:31 AM, Blogger The Meezers said...

Happy Balentimes day!!!


Post a Comment

<< Home